Bitcoin (BTC) Faces A Resistance Test To Confirm Its “Macro Breakout”according to a new analysis.
In a tweet February 2, the on-chain monitoring resource Material Indicators marked key levels to move to support after BTC/USD soared above $24,000.
The bitcoin price is preparing for the confrontation of two trend lines
In what was ultimately a boon for bitcoin bulls, the US Federal Reserve delivered what risk traders wanted to hear on February 1.
With Chairman Jerome Powell using the word “disinflation,” hopes immediately began to bet that rate hikes would end sooner and easier monetary conditions would return instead.
The mood was palpable across all cryptocurrencies, with BTC reversing an initial slide to hit fresh six-month highs of $24,250. at Bitstamp.
Although a subsequent correction sent the largest cryptocurrency down around $500, sentiment has remained upbeat ever since..
Nevertheless, For the good times to continue, Material Indicators believes that the BTC/USD pair must now contend with two trend lines, which have formed resistance for much of 2022..
These are the 50 and 200 week moving averages (WMA)and so far, the bulls have not been able to even retest it, let alone turn it into support.
The 50WMA and 200WMA are currently sitting at $25,345 and $24,837, respectivelyas confirmed by data from Cointelegraph Markets Pro and TradingView.
“Must test key moving averages to confirm macro upside or false breakout,” it read. part of the comment
An accompanying chart showed the state of the Binance order book at the time: resistance was moving up to allow the spot price to rise with it.. As Cointelegraph reported, this is a phenomenon that had already been occurring before the Fed event.
Continuing, Material Indicators described the subsequent BTC price rally as a “Bull Herd Stampede Through the Gate” in the absence of resistance pressure.
“If it drives to the slaughterhouse or auction house, they will be determined on the 50WMA and 200WMA holding lines,” he added..
“Toppy Signals” and “wildcards”
Now, The BTC/USD pair has spent longer than ever below the 200WMA, a key aspect of its 2022 bear market that set it apart from others in its history.
Also, the two WMAs in focus are in the process of forming what is known as a “death cross”, where the descending 50WMA crosses below the 200WMA.
In case this happens, analysts fear that there will be further falls.as has previously occurred with events in shorter time frames,
“There is no question that risk assets have been correlated, but BTC outperformed TradFi in January with a 40% rally”, commented Material Indicators co-founder Keith Alan, formerly of the Fed.
“Now, the SPX is at a monthly triple top and BTC is headed for a weekly death cross. These are toppy signs, but the FED, FANG and the labor market are dealing with wild cards.”
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